Correlation Between Greenlite Ventures and TransAKT

Can any of the company-specific risk be diversified away by investing in both Greenlite Ventures and TransAKT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Greenlite Ventures and TransAKT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greenlite Ventures and TransAKT, you can compare the effects of market volatilities on Greenlite Ventures and TransAKT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Greenlite Ventures with a short position of TransAKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlite Ventures and TransAKT.

Diversification Opportunities for Greenlite Ventures and TransAKT

-0.72

Correlation Coefficient

Greenlite Ventures  TransAKT

Pay attention - limited upside

The 3 months correlation between Greenlite and TransAKT is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Greenlite Ventures and TransAKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAKT and Greenlite Ventures is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Greenlite Ventures are associated (or correlated) with TransAKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAKT has no effect on the direction of Greenlite Ventures i.e., Greenlite Ventures and TransAKT go up and down completely randomly.

Pair Corralation between Greenlite Ventures and TransAKT

Given the investment horizon of 90 days Greenlite Ventures is expected to under-perform the TransAKT. But the pink sheet apears to be less risky and, when comparing its historical volatility, Greenlite Ventures is 13.24 times less risky than TransAKT. The pink sheet trades about -0.15 of its potential returns per unit of risk. The TransAKT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1.01  in TransAKT on September 3, 2024 and sell it today you would earn a total of  1.76  from holding TransAKT or generate 174.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Greenlite Ventures  vs.  TransAKT

Greenlite Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenlite Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

TransAKT

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TransAKT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, TransAKT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenlite Ventures and TransAKT

The main advantage of trading using opposite Greenlite Ventures and TransAKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlite Ventures position performs unexpectedly, TransAKT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TransAKT will offset losses from the drop in TransAKT's long position.

The idea behind Greenlite Ventures and TransAKT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.